According to a survey by GfK NOP, consumer confidence has dropped to recession levels for the fourth time in 37 years. Public concern surrounding the debt crisis in the United States and the Eurozone have had a dramatic effect on people’s spending habits, with consumer confidence dropping to -31. In April this year, it plummeted to -31 but lifted again as Royal Wedding fever gripped the nation, along with brighter weather.
The other two occasions for a drop in consumer confidence occurred in 2008-2009 and at the start of 1990, when a recession had taken hold. As job insecurities and financial worries effect people who aren’t convinced that the country is out of recession, spending habits have changed, with only necessities being purchased. Sarah Cordey, from the British Retail Consortium believes that the poor summer weather has contributed to low confidence in the economy. With only a few days of good weather in August, consumers haven’t felt the urge to go out and purchase summer products like barbecues, summer clothing and garden accessories, which hasn’t helped retailers.
It was suggested by Ms Rhys that the government could give extra support to schemes which encourage small businesses to employ people who have recently lost their jobs. Keeping interest rates low may also help. A survey which was carried out by Nationwide also reflected plummeting confidence levels in July, which was expected to drop even further following the riots which took place in August. The managing director of GfK NOP, Nick Moon said that the continuing downturn in consumer confidence was a huge concern for the government.
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